Rangers 2 - 1 Blackburn Rovers: Rangers boss admits he can't afford any mistakes in transfer market
Smith has not bought a player since August 2008 and has lost six first-team players since the end of last season.
Rangers had a bid of around 2 million accepted for Burnley winger Chris Eagles earlier this month, but the club could not meet the former Manchester United player's wage demands.
Celtic manager Neil Lennon could take his summer arrivals to nine in the coming days but Smith is not panicking as he looks to win a third successive Clydesdale Bank Premier League title.
"In the past in this situation, we've signed a lot of players who haven't worked out, so I want to get a situation where if we're going to bring a player in, he's going to be productive," said Smith, who saw his team earn a 2-1 win over Premiership side Blackburn Rovers yesterday in Sydney.
"I don't want to be bringing someone in then a year later be paying off his contract.
"It's awkward because we only have a bit of money and we need three more players. I need to try to get a couple of players in wider areas, and maybe a striker."
Many of the players Smith has targeted have proven to be out of his price range, and he admitted he may have to look for loan deals.
Smith added: "We have tried to get a few. Chris Eagles was the more public one but we've tried a few and they haven't worked out - not always over money. Obviously when you're going for a better level of player, money is a part of it, but when you're limited like we are you have to balance it by trying to get three players.
"For instance, we were taking a chance on Eagles because he would have taken up most of what we had, and I'd then have had to maybe get another couple on loan.
"But I felt he was worth trying to do that for."
First-half goals from Maurice Edu and Kenny Miller gave Rangers their 2-1 victory over Blackburn in the Sydney Festival of Football.
David Dunn's penalty set up a tense finish but Sam Allardyce's team could not find the net again after exerting late pressure.
Smith fielded Madjid Bougherra at right-back and Andy Webster partnered David Weir in central defence.
Steven Davis was given a central role in a five-man midfield with Kyle Lafferty and Steven Naismith out wide to support Miller up front.
Rovers had only arrived in Australia 33 hours before kick-off and they made a slow start as Weir, Miller and Lafferty all went close before Edu headed a tenth-minute opener from Davis' free-kick. Rangers continued to have the better of the play and Naismith and Lafferty combined to set up Miller to blast into the roof of the net from eight yards just before the break.
Rovers improved after the restart and Allan McGregor saved well from Junior Hoilett, but Miller, who has been suffering from shin splints, hit a penalty against the crossbar after Grant Hanley had brought down Edu.
Dunn made no mistake from his spot-kick, which came after Hoilett fell under Bougherra's challenge.
Substitute John Fleck came close for Rangers before Pascal Chimbonda fired over for Sam Allardyce's side in a late flurry.
With each goal worth a point, the win left Rangers on five points, three behind AEK Athens, who opened the tournament with a 5-3 victory over Sydney FC.
Davis was encouraged by his outing in the middle of the park during Rangers' victory as he finally hopes to nail down a central role at Ibrox.
The Northern Ireland internationalist was forced outside by a lack of wide options but the team's most fluent period came when Davis occupied his preferred position in central midfield.
Davis and Edu lined up just ahead of Lee McCulloch with Kyle Lafferty and Steven Naismith utilised out wide.
The former Aston Villa and Fulham player is excited at the prospect of an extended run in his favourite position.
"I enjoyed playing in the middle and I've spoken a lot since I came up to the club that I'd like to be there," Davis said.
"Hopefully I'll get my chance there this year.
"Last year we had a lot of players with quality who could operate in the middle but some of them have moved on.
"In turn, I'm hoping that means I might get my chance. Having the three of us together worked really well in the middle.
"I like to get on the ball and with Mo [Edu] and Lee doing well, I think the three of us worked as a group. Hopefully that's a good sign of things to come."